Gold and the US dollar are climbing together this morning even though gold fell sharply after Friday's weak jobs report. The gap is explained by what is driving the dollar: a euro slide tied to European fiscal stress, not US rates, while easing oil prices keep long-term Treasury yields in check.
Gold is up about $33 near $4,196 this morning, and the US Dollar Index is also higher, trading above Thursday's high near 102.5 in Asia. That combination usually does not happen, because gold typically falls when the dollar rises.
Friday's jobs data failed to lift gold
Friday's payrolls rose by 29,000 against about 85,000 to 90,000 expected. Revisions also cut 60,000 jobs from July and August, and the unemployment rate rose to 4.2%. Wages grew just 0.1% on the month, and odds of an October rate hike fell to about 20% or less, from about 70% earlier in the week.
That should have been bullish for gold. Instead, gold rose to about $4,239 at the open and then settled $40 lower at $4,162.30, ending the week down 3.6%.
Silver settled at $60.42, down 6.7% on the week. The 10-year yield dipped below 5.17% and then reversed to close at 5.276%, higher on the day, and gold followed the long end rather than the softer Fed outlook.
Stocks rallied while gold fell
The same report sent the S&P 500 up 0.74% and the Nasdaq up 1.19%. Stocks took their cue from the near-term policy rate, which fell. Gold, however, takes its cue from the long end of the bond market, since it pays no income and competes directly with long-term Treasury yields.
The unemployment rise did not look recessionary: participation rose to a four-month high, and the broadest measure of underemployment fell to its lowest since January 2025. A softer Fed without a broken economy is the mix stocks prefer, but it did nothing for gold while long yields kept climbing.
Why gold and the dollar are rising together today
Three factors explain today's move. First, the euro fell to about 1.116, its lowest since May 2025, on fiscal worries in France and a selloff in European bonds, pushing the dollar index higher for reasons unrelated to US rates.
Second, oil is lower after the G7 agreed to release 100 million barrels of crude and diesel from emergency stocks, easing the inflation pressure that had kept long yields elevated. Third, gold priced in euros is rising more than gold priced in dollars, as European investors buy the metal to hedge stress in their own bond markets.
The trend in gold has been set by US long-term yields and by the dollar's US-driven moves, and when Friday's data moved those yields higher, gold fell.
Source: Commodities Analysis & Opinion
Trading involves risk.
Risk Disclaimer
